ICE First Look: Delinquencies Hold Steady in April
Mortgage performance remained broadly stable from March to April, with the overall share of past-due loans unchanged and below pre-pandemic levels, ICE reported Tuesday in its monthly First Look report.
Andy Walden, head of mortgage and housing market research at ICE, noted that an annual increase in past-due loans continues to be concentrated in later-stage delinquencies, while early-stage delinquencies remain below last year’s levels, “suggesting that most homeowners continue to stay on track.”
Walden said cure activity has also rebounded over the past two months, “though it remains below year-ago levels, making it important to monitor in the months ahead.”
Mirza Hodzic, managing director and founder of mortgage servicing advisory firm BlackWolf Advisory Group, Jacksonville, Fla., said what stands out for him about the data is the mix of stability and stress. “The headline delinquency rate is basically flat, but the year-over-year increase is concentrated in 90-plus day delinquencies. That is the bucket that drives the most operational work and the most borrower risk if it is not managed tightly.”
Hodzic called the rebound in cures encouraging. “But the context matters,” he added. “Cures from serious delinquency are still running below last year, so you can see why later stage delinquency remains elevated. That combination tells me servicers should plan for continued pressure on loss mitigation execution and borrower engagement.”
Other key takeaways from the ICE report include:
The overall delinquency rate held steady in April: The national delinquency rate was unchanged in April at 3.35%. Overall, delinquency levels remain 45 basis points below the January 2020 pre-pandemic benchmark but are up by 13 basis points from the same time last year, driven by a rise in seriously delinquent (90-plus days past due, but not in foreclosure) loans.
After cure activity fell sharply November through February, it rebounded in March and April with more than 62,000 borrowers curing seriously delinquent loans in each of those months. “This is up from an average of 42,000 cures during the four preceding months. Despite the improvement, cures from serious delinquency remain 20% below last year’s levels,” ICE said.
Foreclosure starts and sales continued to normalize: April saw 37,000 foreclosure starts, the highest April count since before the pandemic, and 7,900 foreclosure sales, up 22% annually. Despite the uptick, both starts and sales remain below their pre-pandemic norms, reflecting the normalization of foreclosure volumes after historically low activity.
Foreclosure inventory rose: The number of loans in active foreclosure rose by 3,000 in April to 276,000, up 32% from a year ago and above the 271,000 March 2020 pre-pandemic count for a second consecutive month. The 0.50% foreclosure rate is modestly below the March 2020 benchmark of 0.53%, ICE reported.
Prepayments slowed from March but are up on an annual basis: Mortgage prepayments, measured as the single-month mortality rate, fell 13% as rates moved higher, though activity remained significantly stronger than the same time last year.
